TWR
22/08/2014 08:45
GENERAL
REL: 0845 HRS Tower Limited
GENERAL: TWR: Progress on Canterbury rebuild releases $30 million
22 August 2014
Market Information
NZX Limited
Level 2, NZX Centre
11 Cable Street
Wellington
New Zealand
Company Announcements Office
Australian Securities Exchange Limited
Exchange Centre
Level 6, 20 Bridge Street
Sydney NSW 2000
Australia
Progress on Canterbury rebuild releases $30 million
New systems delivering customer service and cost benefits
TOWER Limited (NZE/ASX: TWR) advises that the Reserve Bank of New Zealand
(RBNZ) has completed its annual solvency review and yesterday confirmed a $30
million reduction in the funds required to be held by TOWER as part of its
additional Minimum Solvency Margin (MSM) requirement.
TOWER Chief Executive Officer David Hancock said the $30 million released
from the MSM reflected TOWER's solid progress in settling Canterbury claims
and would be added to the company's already strong capital position.
The RBNZ has required TOWER to hold $80 million in MSM while the Canterbury
rebuild completes, with this now reducing to $50 million. The RBNZ said the
reassessment of the solvency margin takes into account an updated view of the
underlying risks associated with the Canterbury earthquake claims for TOWER,
acknowledging the progress that has been made to date. It has undertaken to
review the solvency margin at least annually.
"We're pleased that our efforts in resolving claims have been recognised and
this capital will be released. We will continue to keep the RBNZ informed on
the progress of our programme of work in Canterbury," said Mr Hancock.
Mr Hancock said that the management of risk and capital remains a key element
of TOWER's strategy to grow shareholder returns. TOWER will provide a capital
update to the market when it releases its full year results in November 2014.
TOWER is also pursuing shareholder returns by growing its general insurance
business, supported by the three pillars of staff engagement, customer
satisfaction and financial performance.
In this regard, Mr Hancock said TOWER was on track to achieve approximately
$4 million of annual cost savings and improved customer service through
launching its upgraded client platform. The upgrade is a key initiative to
rationalise systems, better utilise technology to lower costs and enhance
service delivery.
New customer accounts are now being initiated on the upgraded platform and
more than half of existing customers will be migrated to the new platform as
their policies renew.
Mr Hancock said TOWER was pleased the next phase of the migration programme
has been delivered, ahead of commitments to the market over the past 12
months.
ENDS
David Hancock
Chief Executive Officer
TOWER Limited
ARBN 088 481 234 Incorporated in New Zealand
For further information, please contact:
Tracey Palmer
Head of Corporate Communications
Mobile: +64 21 837 860
Email: [email protected]
End CA:00254248 For:TWR Type:GENERAL Time:2014-08-22 08:45:18
